Rajiv Awas Yojana - India Takes on Slums & Urban Poverty

New Delhi, August 1, 2011 (Washington Bangla Radio / PIB-India) The urban population of India has grown rapidly over the past few decades. In 2001, 27.8 per cent of Indian citizens (286 million) lived in urban areas[1], which has increased to 31.2 per cent (377 million) in 2011[2]. In addition, India is expected to represent 26 per cent of Asia’s proportion (54 per cent) of the world’s urban population by 2050[3]. However, this large growth in urban population has posed a serious challenge with regard to the provision of civic amenities, shelter and livelihood for the vast sections of population especially those that belong to the Lower Income Groups (LIG) as well as the Economically Weaker Sections (EWS). A majority of these reside in slum- 93 million in 2011[4]. The housing shortage, estimated at 24.71 million in 2007, is expected to grow to 26.53 by the end of the current plan period[5].

In a bid to address the issue of slums and urban poverty, the Government of India has undertaken several measures through the five-year plans as well as other policy initiatives and schemes such as:

Valmiki Ambedkar Awas Yojana (VAMBAY): launched in December 2001, VAMBAY was a centrally sponsored scheme with an in-built subsidy for undertaking construction of dwelling units for slum dwellers. The scheme was successful in providing affordable houses to the urban poor and with the launch of JNNURM, elements of this scheme were dovetailed into JNNURM.

Jawaharlal Nehru National Urban Renewal Mission (JNNURM): Launched in 2005 with a 7 year mission period, JNNURM was developed to facilitate fast-track, planned development and renewal of urban areas in the country, and in particular in 65 mission cities. The sub-mission for Basic Services to the Urban Poor (BSUP) focused on granting a 7-point charter of entitlements to the urban poor, namely, affordable housing, water supply, sanitation, security of tenure, health, education and social security.

Swarna Jayanti Shahari Rozgar Yojana (SJSRY): aims at addressing urban poverty through the promotion of gainful livelihood opportunities for the urban poor through both wage employment and entrepreneurship development focusing on community-based delivery mechanisms and particularly targeting women.

Integrated Low Cost Sanitation (ILCS): This scheme envisages the conversion of dry latrines into water seal twin-pit sanitary latrines on a whole town basis.

Affordable Housing in Partnership (AHP): This aims at operationalizing the strategy envisaged in the National Urban Housing and Habitat Policy (NUHHP) of 2007 and was launched in April 2009. It seeks to promote various kinds of public-private partnerships -government with the private sector, the cooperative sector, the financial services sector, the state parastatals, urban local bodies, etc-to create affordable housing stock. Under the scheme, the Government provides subsidy at the rate of Rs.50,000 per affordable unit or 25% of the cost of infrastructure(internal and external),whichever is lower.

Scheme for Interest Subsidy for Housing the Urban Poor (ISHUP): This scheme, introduced in Feb 2009,aims to lighten the repayment burden of home loans with Central Government subsidies for those EWS and LIG households who have no pucca dwelling but own land in an urban area and want to construct or buy a house. The subsidy has been so designed as to provide the banks the comfort of risk abatement.

Announcement of Rajiv Awas Yojana - June 2009

In June 2009, President of India announced “Rajiv Awas Yojana” with a vision of a slum-free India. In pursuance of this vision, the Ministry of Housing & Urban Poverty Alleviation launched the preparatory phase of RAY-i.e. the Slum-free City Planning Scheme (SFCP), which mandates the development of Plans of Action to make cities and states in India slum-free. These Plans focus, not only on curative aspects of existing issues of urban poverty alleviation, but also perspective plans to ensure that every citizen of India, whatever their socio-economic status, is not forced into slum-like conditions in the future. To date about Rs.100 crores has been released to 157 cities across 34 States/Union Territories for the preparation of the city and state-level plans of action. At the same time, the Ministry of Housing & Urban Poverty Alleviation has been steadily working towards the development of the main scheme of Rajiv Awas Yojana (RAY) and has held a series of consultations since 2009 to engage a variety of stakeholders like planning experts, NGOs, State Governments, Urban Local Bodies, bankers, representatives of the real estate industry, Central Government Departments including Planning Commission etc in the design of RAY.

Approval by Cabinet - June 2011

On 2nd June 2011, the Cabinet Committee on Economic Affairs approved the launch of Phase I of RAY to provide financial assistance to States willing to assign property rights to slum dwellers, for the provision of shelter and basic civic and social services for slum redevelopment and for the creation of affordable housing stock. The scheme is expected to cover about 250 cities (with a population of 1 lakh and above) covering about 32.1 million slum dwellers by the end of the 12th Five Year Plan (2012-2017). The key features of the scheme include:

A ‘whole city, all slums, whole slum’ approach;

Pace of progress to be set by the states;

Central Government to bear 50 per cent of slum re-development costs;

The two schemes of AHP and ISHUP have been dovetailed into RAY;

RAY encourages the use of Central Government assistance by the states and cities towards viability gap funding;

Mortgage Risk Guarantee Fund will be established to facilitate lending to the urban poor for housing with an initial corpus of Rs. 1,000 crores from the Centre;

Reform-driven approach to urban poverty alleviation crucial to the process; no fresh sanctions after the 1st year of project sanction without reforms and

Centrality of community participation across all activities of the scheme.

Reform-driven Initiatives

RAY, designed on the basis of the experience of implementing BSUP (JNNURM), focuses on the implementation of reforms as a larger policy overhaul to give the urban poor a voice in the governance of the city. Central assistance under RAY, therefore, is conditional to the implementation of reforms by the states. These include:

Enactment of law regarding the assignment of property rights to the slum dwellers;

Reservation of 20-25 per cent of developed land for EWS/LIG housing;

Earmarking 25 per cent of the municipal budget for providing basic services to the urban poor;

Implementation of the 7-point charter of entitlements (as under JNNURM) and

Commitments with timelines for amending rent control acts, review of land policies and simplification of approval processes for housing projects.

The most crucial reform to be enacted is the property rights reform. To that end, the Ministry of Housing & Urban Poverty Alleviation has drafted a Model Property Rights to Slum Dwellers Act 2011 focusing, inter alia, on the following:

Each individual urban poor household living in slums is to be given the right to a dwelling space (either a unit/house, or a plot on which a dwelling unit/house may be built);

The title is to be either exclusively in the name of the female head of household, or jointly in the name of the male head of household and his wife;

Every slum dweller will be given a legal document of entitlement to the dwelling space, and by extension, the provision of basic civic services and amenities and

The dwelling space is mortgagable, allowing slum dwellers to use it to raise finances.

Duration

The duration of Rajiv Awas Yojana will be in two phases: Phase-I for a period of two years from the date of approval of the scheme and Phase-II which will cover the remaining period of the Twelfth Five Year Plan 2013-17, RAY will be run in a Mission Mode.

Scope

RAY will provide the support to enable states to redevelop all existing slums in a holistic and integrated way and to create new affordable housing stock. The existing schemes of Affordable Housing in Partnership, and Interest Subsidy for Housing the Urban Poor (ISHUP), would be dovetailed into this scheme. No new projects under the BSUP and IHSDP scheme of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will be sanctioned once implementation of RAY scheme is taken up except to consume existing 11th Plan allocations that may be left uncommitted. However, projects sanctioned under the two schemes will continue to receive Central assistance as per the sanctions and the existing provision of the schemes.

Coverage

The choice of cities would be made by the States, according to their aspirations and financial and resource arrangements in consultation with the Centre. About 250 cities, mainly Class I, are expected to be covered by the end of the Twelfth Five Year Plan.

Among the cities selected, States would be required to include all the mission cities of JNNURM, so as to complete the process begun; preferably cities with more than 3 lakh population as per 2001 Census; and other smaller cities, with due consideration to the criterion of pace of growth of the city, of slums within the city of predominance of minority population, areas where property rights already stand assigned. In the case of North-Eastern States and special category States (Jammu & Kashmir, Himachal Pradesh and Uttarakhand), where town sizes are very small, criteria other than population may be adopted. However, priority should be accorded by all States to towns with larger number of people living in slums so that the goal of RAY to achieve the status of Slum-free State/Country is attained in the shortest time span.

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